Notes & Quotes: Business for Punks by James Watt

At BrewDog we reject the status quo, we are passionate, we don’t give a damn and we always do something which is true to ourselves. Our approach has been anti-authoritarian and non-conformist from the word go.

Ultimately for a crew to be effective leadership needs to come from the top down, the bottom up and everywhere in between.

Michael Jackson led to Martin and I deciding to take the plunge, follow our dreams and start our very own craft brewery. Michael, upon tasting one of our home-brewed concoctions, told us to quit our jobs and start brewing beer. It was the last bit of advice we ever listened to.

Rip up those stuffy old text books, reject the status quo, tear down the establishment and embrace the dawn of a new era.

The decisions you make during your business’s formative months will define your place in the world. They will be the most monumental decisions you will ever make, shaping your fledgling business in ways you cannot yet imagine. So you’d better buckle up, hold tight and step up to the challenge. You will need to make sure your ideas, and their realization, are nothing short of awesome.

Businesses fail. Businesses die. Businesses fade into oblivion. Revolutions never die. So start a revolution, not a business.

Your biggest challenge from day one is to give people a reason to care, and that reason has got to be your mission.

The market for something to believe in is infinite. You need to give people something to believe in.

If money is your motivation then you need to be the greediest, meanest son of a bitch on the planet to make a business work. Solely money-focused businesses do exist, but I don’t like being around them or their people.

Assume no one will care, assume no one will give a damn, assume no one will want to listen. Then figure out how to make people want to care about what you do. If you can’t, then your business is doomed.

Twenty-first-century consumers increasingly want to align themselves with companies and organizations whose missions and beliefs are compatible with, and enhance, their own belief systems.

Advice is for freaks and clowns. The thing about being driven is you need to know your own way.

The only thing you learn from mistakes is that you are not good enough and that you need to get better.

Don't follow when you can lead.

Be a selfish bastard. Seriously, you have to be. If you’re not 110% up for it, no one else is going to give a damn. So dance to your own tune and do it your way. Make crafted products you love, create environments you want to hang out in and give the kind of service you’d love to receive yourself.

Constraints are just advantages in disguise and opportunities to be innovative and imaginative. Cherish constraints. Embrace them.

Be very wary of external agencies and partners. They all speak a good game and promise the earth but at the end of the day they have no reason to care as much as you.

Living the punk DIY ethic means not relying on existing systems, processes or advisers as this would foster dependence on the system.

You need to be an independent, an outsider, a nomad, a libertine. You need to be completely self-sufficient and not rely on anyone for anything. If a skill set is important to your business, then you better learn it and learn it fast.

You need to create pull to be sustainable. And you don’t create pull through sales.

Everything you do is sales and all of your employees are selling all the time. Act accordingly.

Pretty much all you need to do for people to hate you is to be successful doing something that you love.

When you manage to get the Holy Grail of other businesses copying you, whilst others are hating you, you know you have hit a home run.

Eighty per cent of all new businesses fail. And they always fail for financial reasons. The more you understand the numbers the less likely they are to crush you and your dreams.

Comfort zones are places where average people do mediocre things. If you are even the tiniest bit comfortable then you need to push harder.

The lifeblood of your business is cash. If you can’t manage a cash flow, then you can’t run a business.

Spend every last dime as if it actually was your last and ensure that your team spend every single cent as if it were their own.

It was about empowering the change-makers, the misfits, the libertines, the community, the frustrated, the independents, the punks. Together we can, and will, change anything.

There is a huge difference between making a sale and actually being paid for that sale.

If you price down you down-sell everything, and there’s no going back.

You need to defend your price point like a junkyard Rottweiler.

The best way to decide how to allocate your cash and resources is to fully comprehend the opportunity-cost implications of every possible decision you could make in any situation.

Everything you and your business does is marketing. Modern brands don’t belong to companies, they belong to the customer.

Anything that you do, anywhere in your business, which is not completely aligned with your mission and your values is like a tiny little suicide.

Today the only way to build a brand is to live that brand. People want to feel like they are buying into something bigger than themselves. Your brand must give them that opportunity.

For a stunt to really work then it needs to be intrinsically linked to your mission and you already need to have a really strong following and a credible brand.

Whatever type of business you are in you need to start building a community and start turning customers into fans.

The biggest mistake you can make is actually caring what people think. To hell with opinions, conventions and consequences. It is all just a game.

We hate bad beer so much that we are on a permanent campaign to destroy as much of it as we possibly can.

Chasing someone else’s perception of cool is one of the stupidest mistakes it is possible to make.

Having a target market and explicitly marketing to them is a sure-fire way to patronize and alienate pretty much all of the intelligent population.

There are only three very simple things you need to know about sales.

Focus on the product.

Be open and honest.

Don't compete on price.

Sales are merely the by-product of being great elsewhere.

If you can’t get your staff to fall in love with your business, you haven’t got a chance in hell of a customer to even consider liking it.

Any great business today is built on these simple yet enduring and all encapsulating pillars. The three pillars are:

Company culture

The quality of your core offering

Gross margin

Studies show that employees working in a company with a strong company culture are more than twice as effective as employees working in a company with a weak culture.

The things that apply to your business externally are just as important, if not even more so, inside it.

People mimic the behavior and beliefs of their leaders so make sure that you, and the people leading your business, live and breathe the behavior you want to perpetuate.

It isn’t enough for people to know what their business is doing. They have to know why it is doing it.

Companies need to wise up and max out. Smart companies realize, rather than minimizing wages, it is infinitely more productive and profitable in the long term to look to maximize engagement, loyalty, retention and productivity.

Culture has to be a priority from the get-go and it has to start with the founders and then flow from the early employees.

Working on your company culture is actually a much more effective form of marketing than pretty much all traditional marketing mediums combined. Culture is marketing. Culture is brand. Culture now resonates much more with consumers than advertising does.

We have two simple rules for hiring:

They have to be as passionate about our mission as we are.

They have to be the right cultural fit.

If you want your team to really rumble you’ll need to recognize their efforts. Explicitly and frequently. Leave your heartfelt praise and encouragement ringing in their ears and the impact can be off the charts.

Unless you add amazing people to your team, you are going to spend a hell of a lot of time trying to get average people to consistently make great decisions.

Teams tend to operate at, or close to, the ability level of the weakest team member.

Whatever happens, good, bad or ugly, it is a direct consequence of your leadership.

Leaders are rare inspirational beings. Managers are ten a penny; the world is full of adequately competent middle managers trapped in corporate hell.

Work harder, think smarter and focus with laser-like efficiency.

At BrewDog we have a fifty-fifty rule for our five directors. I and the other four people who lead our business are only allowed to spend half of our time working on the day-to-day operations of the company, on solving current challenges and dealing with existing issues and we have to spend at least half of our time working on ways to improve, grow and develop our business, on ways to drive us towards our next phase of growth.

Look for inspiration everywhere. The only place you should never look is within your own industry. Screw what all the other clowns are doing. Ignore it, blank it out; it is of no relevance or significance whatsoever.

Comfort zones are places where average people do mediocre things.

You will not always get it right. But every time you move, every time you make a bold decision, it will take you one step closer to finding the path you are searching for.

Your actions will determine your destiny.

The more action you take, the more opportunities open themselves up to you.

Your team should be governed by your values and your culture and not by policies and rules.

Keep the team as well informed as possible so they can buy into the excitement of what the business is both planning and currently achieving, both of which act as a great motivator.

Put systems in place before, as opposed to after, they are needed and put an infrastructure in place for where you want to be in two years’ time.

Write down your five biggest problems, sit down in a room with your team, and solve them. Then on to the next five.

Attitude is the difference between a setback and an adventure.

So whilst the fools, rats and wannabes are massaging each other’s egos you need to be plotting your revenge. Not on them specifically, but on the system that bred such morons. You need to be quietly planning how to blow the status quo to pieces and create a whole new world order.

You should always imagine the communication from the other party’s perspective. Put thought into what you say and how you say it.

Don’t shout too often, so that you can make sure it truly counts when you want to roar.

It is paramount you track at least ten of the most important performance indicators of your business monthly.

When it comes to your management accounts you should definitely be tracking sales, cost of sales, overheads, gross margin, EBITDA and net margin. You will also need to monitor items on your balance sheet at regular and short intervals, such as debtors, creditors and, most importantly, your cash position. In addition you should track certain other KPIs (key performance indicators), depending on what is important in your business and your current focus. For instance, you should consider tracking things like: average spend per transaction, staff turnover, customer complaints, referrals, shipment accuracy, sales mix, refunds, wastage, sales growth, additional customers, online engagement or staff happiness (to name but a few). In determining which items you need to keep close tabs on it really depends on your business and your objectives.

No measurement = no reporting = no visibility = no one cares = your ultimate demise.

Always do your negotiation homework. Find out about the other party, what makes them tick, their likes and dislikes. Ultimately think about what’s in it for them. Then build your argument around how the deal helps them, because at the end of the day they care much more about what is in their interests than yours.

Find a solution, structure and deal they feel comfortable with, and positive about. But one that is ultimately engineered around what you want.

You need to provide the vision, strategy and tools to help your team achieve your goals.

Whatever goals you’ve set, you should have a list of pint-sized systems, things which you rigorously adhere to without fail, that if consistently applied will help ensure you both achieve your goals and strengthen your brand and company in the long run too.

Committees are breeding grounds for compromise as the tyranny of conformity rules the roost. Conformity is no place for risk and compromise is no place for innovation.